China Vanke Co., Ltd. (02202, HK) has disclosed its 2025 financial report, revealing figures far worse than anticipated. The data highlights a severe deterioration in the company's financial health.
Key metrics are alarming. Net profit attributable to shareholders recorded a loss of 88.56 billion yuan, a 79% increase from the previous year's loss of 49.48 billion yuan, marking the second consecutive year of significant losses. Revenue fell to 233.4 billion yuan, down 32% year-on-year, while gross profit plummeted by 95% to just 1.259 billion yuan. A critical concern is the substantial gap between short-term debt and available cash: interest-bearing debt due within one year stands at 160.56 billion yuan, against cash reserves of only 67.24 billion yuan, leaving a deficit of nearly 100 billion yuan.
Despite these results, Vanke’s A-shares and H-shares both rose on April 1. A-shares closed up 1.25% at 4.04 yuan per share, while H-shares increased by 2.41% to 2.98 Hong Kong dollars per share, with a total market capitalization of 48.2 billion yuan.
Vanke attributed the losses to four main factors, the most significant being a sharp decline in property development project settlements and persistently low gross margins. In 2025, the company focused on clearing inventory of completed and near-completed properties acquired at high costs in previous years, resulting in sales and margins falling below investment expectations.
While Vanke pointed to broader industry weakness—national commercial housing sales area and value dropped by 8.7% and 12.6%, respectively—the company's own performance was considerably worse. Its sales area and value fell by 43.4% and 45.5%, declines roughly five and 3.6 times the national average, indicating that internal issues are the primary cause.
Comparing historical data, Vanke’s net profit peaked in 2020 at 41.8 billion yuan. By 2024, it had swung to a loss of 49.2 billion yuan, exceeding the peak profit figure. The 2025 results show further deterioration. Revenue, which peaked at 503.8 billion yuan in 2022, was nearly halved by 2025. Gross profit tells an even starker story: after reaching a high of 132.2 billion yuan in 2019, it shrank to 27.8 billion yuan in 2024 before collapsing to just 1.259 billion yuan in 2025—insufficient to cover sales and marketing expenses of 7.4 billion yuan and administrative costs of 9.2 billion yuan.
By business segment, property development and related asset operations, contributing 81.7% of revenue, reported a gross margin of -2.3%. Property services, accounting for 15.2% of revenue, maintained a positive margin of 12.3%, though both segments saw declines from 2024.
Leverage ratios worsened significantly. The net gearing ratio rose to 123.5%, up 42.9 percentage points from end-2024, while the asset-liability ratio increased to 76.9%. Total interest-bearing debt reached 358.48 billion yuan, predominantly bank loans. The proportion of short-term debt also grew, accounting for 44.8% of total borrowing. Cash reserves fell by 20.92 billion yuan to 67.24 billion yuan, worsening liquidity pressure.
To address repayment pressures, Vanke has relied on debt extensions and shareholder support, including 33.52 billion yuan in loans from major shareholder Shenzhen Metro. A further 2.36 billion yuan shareholder loan was secured in January 2026.
Management turmoil has added to investor concerns. Founder Wang Shi reportedly faces travel restrictions related to historical governance issues. Former chairman Yu Liang, who retired in January 2026, has not been seen publicly since. Ex-board secretary Zhu Xu was ordered to return nearly 100 million yuan in compensation from 2021–2024. Former president Zhu Jiusheng was subjected to criminal measures in October 2025, and former chairman Xin杰 was investigated after only nine months in office. Several regional heads have also been implicated.
Looking ahead, Vanke’s 2026 plan emphasizes risk control and development, focusing on exiting underperforming markets, improving products and services, exploring business innovation, and leveraging AI. However, the report offers little detail on how the company intends to address its massive debt or return to profitability.
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